Supreme Court Bowman v Monsanto

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1(Slip Opinion) OCTOBER TERM, 2012Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as isbeing done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader.See United States v.Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

BOWMAN v. MONSANTO CO. ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

No. 11796. Argued February 19, 2013Decided May 13, 2013

Respondent Monsanto invented and patented Roundup Ready soybean

seeds, which contain a genetic alteration that allows them to survive

exposure to the herbicide glyphosate. It sells the seeds subject to a

licensing agreement that permits farmers to plant the purchased

seed in one, and only one, growing season. Growers may consume or

sell the resulting crops, but may not save any of the harvested soy-

beans for replanting. Petitioner Bowman purchased Roundup Ready

soybean seed for his first crop of each growing season from a company

associated with Monsanto and followed the terms of the licensing

agreement. But to reduce costs for his riskier late-season planting,

Bowman purchased soybeans intended for consumption from a grain

elevator; planted them; treated the plants with glyphosate, killing allplants without the Roundup Ready trait; harvested the resulting

soybeans that contained that trait; and saved some of these harvest-

ed seeds to use in his late-season planting the next season. After dis-

covering this practice, Monsanto sued Bowman for patent infringe-

ment. Bowman raised the defense of patent exhaustion, which gives

the purchaser of a patented article, or any subsequent owner, the

right to use or resell that article. The District Court rejected Bow-

mans defense and the Federal Circuit affirmed.

Held: Patent exhaustion does not permit a farmer to reproduce patent-

ed seeds through planting and harvesting without the patent holders

permission. Pp. 410.

(a) Under the patent exhaustion doctrine, the initial authorized

sale of a patented article terminates all patent rights to that item,

Quanta Computer, Inc. v. LG Electronics, Inc., 553 U. S. 617, 625,and confers on the purchaser, or any subsequent owner, the right to

use [or] sell the thing as he sees fit, United States v. Univis Lens Co.,


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2 BOWMAN v. MONSANTO CO.Syllabus

316 U. S. 241, 249250. However, the doctrine restricts the patent-

ees rights only as to the particular article sold, id., at 251; it leaves

untouched the patentees ability to prevent a buyer from making new

copies of the patented item. By planting and harvesting Monsantos

patented seeds, Bowman made additional copies of Monsantos pa-

tented invention, and his conduct thus falls outside the protections of

patent exhaustion. Were this otherwise, Monsantos patent would

provide scant benefit. After Monsanto sold its first seed, other seed

companies could produce the patented seed to compete with Monsan-

to, and farmers would need to buy seed only once. Pp. 47.

(b) Bowman argues that exhaustion should apply here because he

is using seeds in the normal way farmers do, and thus allowing Mon-

santo to interfere with that use would create an impermissible excep-

tion to the exhaustion doctrine for patented seeds. But it is reallyBowman who is asking for an exception to the well-settled rule that

exhaustion does not extend to the right to make new copies of the pa-

tented item. If Bowman was granted that exception, patents on

seeds would retain little value. Further, applying the normal rule

will allow farmers to make effective use of patented seeds. Bowman,

who purchased seeds intended for consumption, stands in a peculiar-

ly poor position to argue that he cannot make effective use of his soy-

beans. Bowman conceded that he knew of no other farmer who

planted soybeans bought from a grain elevator. In the more ordinary

case, when a farmer purchases Roundup Ready seed from Monsanto

or an affiliate, he will be able to plant it in accordance with Monsan-

tos license to make one crop. Pp. 710.

657 F. 3d 1341, affirmed.

KAGAN, J., delivered the opinion for a unanimous Court.


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_________________

_________________

1Cite as: 569 U. S. ____ (2013)

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in thepreliminary print of the United States Reports. Readers are requested tonotify the Reporter of Decisions, Supreme Court of the United States, Wash-ington, D. C. 20543, of any typographical or other formal errors, in orderthat corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

No. 11796

VERNON HUGH BOWMAN, PETITIONER v. MONSANTO COMPANYET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

[May 13, 2013] JUSTICE KAGAN delivered the opinion of the Court.

Under the doctrine of patent exhaustion, the authorized

sale of a patented article gives the purchaser, or any sub-

sequent owner, a right to use or resell that article. Such a

sale, however, does not allow the purchaser to make new

copies of the patented invention. The question in this case

is whether a farmer who buys patented seeds may repro-

duce them through planting and harvesting without the

patent holders permission. We hold that he may not.

I

Respondent Monsanto invented a genetic modification

that enables soybean plants to survive exposure to glypho-

sate, the active ingredient in many herbicides (including

Monsantos own Roundup). Monsanto markets soybean seed

containing this altered genetic material as Roundup Ready

seed. Farmers planting that seed can use a glyphosate-

based herbicide to kill weeds without damaging their crops.

Two patents issued to Monsanto cover various aspects

of its Roundup Ready technology, including a seed in-

corporating the genetic alteration. See Supp. App. SA121(U. S. Patent Nos. 5,352,605 and RE39,247E); see also


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2 BOWMAN v. MONSANTO CO.Opinion of the Court

657 F. 3d 1341, 13431344 (CA Fed. 2011).

Monsanto sells, and allows other companies to sell,

Roundup Ready soybean seeds to growers who assent to a

special licensing agreement. See App. 27a. That agree-

ment permits a grower to plant the purchased seeds in one

(and only one) season. He can then consume the resulting

crop or sell it as a commodity, usually to a grain elevator

or agricultural processor. See 657 F. 3d, at 13441345.

But under the agreement, the farmer may not save any of

the harvested soybeans for replanting, nor may he supply

them to anyone else for that purpose. These restrictions

reflect the ease of producing new generations of RoundupReady seed. Because glyphosate resistance comes from

the seeds genetic material, that trait is passed on from

the planted seed to the harvested soybeans: Indeed, a

single Roundup Ready seed can grow a plant containing

dozens of genetically identical beans, each of which, if

replanted, can grow another such plantand so on and so

on. See App. 100a. The agreements terms prevent the

farmer from co-opting that process to produce his own

Roundup Ready seeds, forcing him instead to buy from

Monsanto each season.

Petitioner Vernon Bowman is a farmer in Indiana who,it is fair to say, appreciates Roundup Ready soybean seed.

He purchased Roundup Ready each year, from a company

affiliated with Monsanto, for his first crop of the season.

In accord with the agreement just described, he used all of

that seed for planting, and sold his entire crop to a grain

elevator (which typically would resell it to an agricultural

processor for human or animal consumption).

Bowman, however, devised a less orthodox approach for

his second crop of each season. Because he thought such

late-season planting risky, he did not want to pay the

premium price that Monsanto charges for Roundup Ready

seed. Id., at 78a; see Brief for Petitioner 6. He thereforewent to a grain elevator; purchased commodity soybeans


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3Cite as: 569 U. S. ____ (2013)Opinion of the Court

intended for human or animal consumption; and planted

them in his fields.1 Those soybeans came from prior har-

vests of other local farmers. And because most of those

farmers also used Roundup Ready seed, Bowman could

anticipate that many of the purchased soybeans would

contain Monsantos patented technology. When he applied

a glyphosate-based herbicide to his fields, he confirmed

that this was so; a significant proportion of the new plants

survived the treatment, and produced in their turn a new

crop of soybeans with the Roundup Ready trait. Bowman

saved seed from that crop to use in his late-season plant-

ing the next yearand then the next, and the next, untilhe had harvested eight crops in that way. Each year, that

is, he planted saved seed from the year before (sometimes

adding more soybeans bought from the grain elevator),

sprayed his fields with glyphosate to kill weeds (and any

non-resistant plants), and produced a new crop of glyphosate-

resistanti.e., Roundup Readysoybeans.

After discovering this practice, Monsanto sued Bowman

for infringing its patents on Roundup Ready seed. Bow-

man raised patent exhaustion as a defense, arguing that

Monsanto could not control his use of the soybeans be-

cause they were the subject of a prior authorized sale(from local farmers to the grain elevator). The District

Court rejected that argument, and awarded damages to

Monsanto of $84,456. The Federal Circuit affirmed. It

reasoned that patent exhaustion did not protect Bowman

because he had created a newly infringing article. 657

F. 3d, at 1348. The right to use a patented article follow-

1 Grain elevators, as indicated above, purchase grain from farmers

and sell it for consumption; under federal and state law, they generally

cannot package or market their grain for use as agricultural seed. See

7 U. S. C. 1571; Ind. Code 1515132 (2012). But because soybeans

are themselves seeds, nothing (except, as we shall see, the law) pre-vented Bowman from planting, rather than consuming, the product he

bought from the grain elevator.


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ing an authorized sale, the court explained, does not

include the right to construct an essentially new article on

the template of the original, for the right to make the

article remains with the patentee. Ibid. (brackets and

internal quotation marks omitted). Accordingly, Bowman

could not replicate Monsantos patented technology by

planting it in the ground to create newly infringing genetic

material, seeds, and plants. Ibid.

We granted certiorari to consider the important ques-

tion of patent law raised in this case, 568 U. S. ___ (2012),

and now affirm.

II

The doctrine of patent exhaustion limits a patentees

right to control what others can do with an article embody-

ing or containing an invention.2 Under the doctrine, the

initial authorized sale of a patented item terminates all

patent rights to that item. Quanta Computer, Inc. v. LG

Electronics, Inc., 553 U. S. 617, 625 (2008). And by ex-

haust[ing] the [patentees] monopoly in that item, the sale

confers on the purchaser, or any subsequent owner, the

right to use [or] sell the thing as he sees fit. United

States v. Univis Lens Co., 316 U. S. 241, 249250 (1942).

We have explained the basis for the doctrine as follows:

[T]he purpose of the patent law is fulfilled with respect to

any particular article when the patentee has received his

reward . . . by the sale of the article; once that purpose is

realized the patent law affords no basis for restraining the

use and enjoyment of the thing sold. Id., at 251.

Consistent with that rationale, the doctrine restricts a

patentees rights only as to the particular article sold,

ibid.; it leaves untouched the patentees ability to prevent

2 The Patent Act grants a patentee the right to exclude others from

making, using, offering for sale, or selling the invention. 35 U. S. C.154(a)(1); see 271(a) ([W]hoever without authority makes, uses,

offers to sell, or sells any patented invention . . . infringes the patent).


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a buyer from making new copies of the patented item.

[T]he purchaser of the [patented] machine . . . does not

acquire any right to construct another machine either for

his own use or to be vended to another. Mitchell v.

Hawley, 16 Wall. 544, 548 (1873); see Wilbur-Ellis Co. v.

Kuther, 377 U. S. 422, 424 (1964) (holding that a purchas-

ers reconstruction of a patented machine would im-

pinge on the patentees right to exclude others from mak-

ing. . . the article (quoting 35 U. S. C. 154 (1964 ed.))).

Rather, a second creation of the patented item call[s]

the monopoly, conferred by the patent grant, into play for

a second time. Aro Mfg. Co. v. Convertible Top Replace-ment Co., 365 U. S. 336, 346 (1961). That is because the

patent holder has received his reward only for the actual

article sold, and not for subsequent recreations of it.

Univis, 316 U. S., at 251. If the purchaser of that article

could make and sell endless copies, the patent would

effectively protect the invention for just a single sale.

Bowman himself disputes none of this analysis as a gen-

eral matter: He forthrightly acknowledges the well set-

tled principle that the exhaustion doctrine does not

extend to the right to make a new product. Brief for

Petitioner 37 (citingAro, 365 U. S., at 346).Unfortunately for Bowman, that principle decides this

case against him. Under the patent exhaustion doctrine,

Bowman could resell the patented soybeans he purchased

from the grain elevator; so too he could consume the beans

himself or feed them to his animals. Monsanto, although

the patent holder, would have no business interfering in

those uses of Roundup Ready beans. But the exhaustion

doctrine does not enable Bowman to make additional

patented soybeans without Monsantos permission (either

express or implied). And that is precisely what Bowman

did. He took the soybeans he purchased home; planted

them in his fields at the time he thought best; appliedglyphosate to kill weeds (as well as any soy plants lacking


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the Roundup Ready trait); and finally harvested more

(many more) beans than he started with. That is how to

make a new product, to use Bowmans words, when the

original product is a seed. Brief for Petitioner 37; see

Websters Third New International Dictionary 1363 (1961)

(make means cause to exist, occur, or appear, or more

specifically, plant and raise (a crop)). Because Bowman

thus reproduced Monsantos patented invention, the ex-

haustion doctrine does not protect him.3

Were the matter otherwise, Monsantos patent would

provide scant benefit. After inventing the Roundup Ready

trait, Monsanto would, to be sure, receiv[e] [its] rewardfor the first seeds it sells. Univis, 316 U. S., at 251. But

in short order, other seed companies could reproduce the

product and market it to growers, thus depriving Mon-

santo of its monopoly. And farmers themselves need only

buy the seed once, whether from Monsanto, a competitor,

or (as here) a grain elevator. The grower could multiply

his initial purchase, and then multiply that new creation,

ad infinitumeach time profiting from the patented seed

without compensating its inventor. Bowmans late-season

plantings offer a prime illustration. After buying beans

for a single harvest, Bowman saved enough seed each yearto reduce or eliminate the need for additional purchases.

3 This conclusion applies however Bowman acquired Roundup Ready

seed: The doctrine of patent exhaustion no more protected Bowmans

reproduction of the seed he purchased for his first crop (from a Monsanto-

affiliated seed company) than the beans he bought for his second

(from a grain elevator). The difference between the two purchases was

that the firstbut not the secondcame with a license from Monsanto

to plant the seed and then harvest and market one crop of beans. We

do not here confront a case in which Monsanto (or an affiliated seed

company) sold Roundup Ready to a farmer without an express license

agreement. For reasons we explain below, we think that case unlikely

to arise. See infra, at 9. And in the event it did, the farmer mightreasonably claim that the sale came with an implied license to plant

and harvest one soybean crop.


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Monsanto still held its patent, but received no gain from

Bowmans annual production and sale of Roundup Ready

soybeans. The exhaustion doctrine is limited to the par-

ticular item sold to avoid just such a mismatch between

invention and reward.

Our holding today also follows from J. E. M. Ag Supply,

Inc. v. Pioneer Hi-Bred Intl, Inc., 534 U. S. 124 (2001).

We considered there whether an inventor could get a

patent on a seed or plant, or only a certificate issued under

the Plant Variety Protection Act (PVPA), 7 U. S. C. 2321

et seq. We decided a patent was available, rejecting the

claim that the PVPA implicitly repealed the Patent Actscoverage of seeds and plants. On our view, the two stat-

utes established different, but not conflicting schemes:

The requirements for getting a patent are more stringent

than those for obtaining a PVP certificate, and the pro-

tections afforded by a patent are correspondingly greater.

J. E. M., 534 U. S., at 142. Most notable here, we ex-

plained that only a patent holder (not a certificate holder)

could prohibit [a] farmer who legally purchases and

plants a protected seed from saving harvested seed for

replanting. Id., at 140; see id., at 143 (noting that the

Patent Act, unlike the PVPA, contains no exemptio[n] forsaving seed). That statement is inconsistent with apply-

ing exhaustion to protect conduct like Bowmans. If a sale

cut off the right to control a patented seeds progeny, then

(contrary to J. E. M.) the patentee could not prevent the

buyer from saving harvested seed. Indeed, the patentee

could not stop the buyer from selling such seed, which

even a PVP certificate owner (who, recall, is supposed to

have fewer rights) can usually accomplish. See 7 U. S. C.

2541, 2543. Those limitations would turn upside-down

the statutory scheme J. E. M. described.

Bowman principally argues that exhaustion should

apply here because seeds are meant to be planted. Theexhaustion doctrine, he reminds us, typically prevents a


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patentee from controlling the use of a patented product

following an authorized sale. And in planting Roundup

Ready seeds, Bowman continues, he is merely using them

in the normal way farmers do. Bowman thus concludes

that allowing Monsanto to interfere with that use would

creat[e] an impermissible exception to the exhaustion

doctrine for patented seeds and other self-replicating

technologies. Brief for Petitioner 16.

But it is really Bowman who is asking for an unprece-

dented exceptionto what he concedes is the well settled

rule that the exhaustion doctrine does not extend to the

right to make a new product. See supra, at 5. Reproduc-ing a patented article no doubt uses it after a fashion.

But as already explained, we have always drawn the

boundaries of the exhaustion doctrine to exclude that

activity, so that the patentee retains an undiminished

right to prohibit others from making the thing his patent

protects. See, e.g., Cotton-Tie Co. v. Simmons, 106 U. S.

89, 9394 (1882) (holding that a purchaser could not use

the buckle from a patented cotton-bale tie to make a new

tie). That is because, once again, if simple copying were a

protected use, a patent would plummet in value after the

first sale of the first item containing the invention. Theundiluted patent monopoly, it might be said, would extend

not for 20 years (as the Patent Act promises), but for only

one transaction. And that would result in less incentive

for innovation than Congress wanted. Hence our repeated

insistence that exhaustion applies only to the particular

item sold, and not to reproductions.

Nor do we think that rule will prevent farmers from

making appropriate use of the Roundup Ready seed they

buy. Bowman himself stands in a peculiarly poor position

to assert such a claim. As noted earlier, the commodity

soybeans he purchased were intended not for planting, but

for consumption. See supra, at 23. Indeed, Bowmanconceded in deposition testimony that he knew of no other


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farmer who employed beans bought from a grain elevator

to grow a new crop. See App. 84a. So a non-replicating

use of the commodity beans at issue here was not just

available, but standard fare. And in the more ordinary

case, when a farmer purchases Roundup Ready seed qua

seedthat is, seed intended to grow a crophe will be

able to plant it. Monsanto, to be sure, conditions the

farmers ability to reproduce Roundup Ready; but it does

notcould not realisticallypreclude all planting. No

sane farmer, after all, would buy the product without

some ability to grow soybeans from it. And so Monsanto,

predictably enough, sells Roundup Ready seed to farmerswith a license to use it to make a crop. See supra, at 2, 6,

n. 3. Applying our usual rule in this context therefore will

allow farmers to benefit from Roundup Ready, even as it

rewards Monsanto for its innovation.

Still, Bowman has another seeds-are-special argument:

that soybeans naturally self-replicate or sprout unless

stored in a controlled manner, and thus it was the planted

soybean, not Bowman himself, that made replicas of

Monsantos patented invention. Brief for Petitioner 42;

see Tr. of Oral Arg. 14 ([F]armers, when they plant seeds,

they dont exercise any control . . . over their crop or overthe creative process). But we think that blame-the-bean

defense tough to credit. Bowman was not a passive ob-

server of his soybeans multiplication; or put another way,

the seeds he purchased (miraculous though they might be

in other respects) did not spontaneously create eight suc-

cessive soybean crops. As we have explained, supra at

23, Bowman devised and executed a novel way to harvest

crops from Roundup Ready seeds without paying the usual

premium. He purchased beans from a grain elevator

anticipating that many would be Roundup Ready; applied

a glyphosate-based herbicide in a way that culled any

plants without the patented trait; and saved beans fromthe rest for the next season. He then planted those


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Roundup Ready beans at a chosen time; tended and treated

them, including by exploiting their patented glyphosate-

resistance; and harvested many more seeds, which he

either marketed or saved to begin the next cycle. In all

this, the bean surely figured. But it was Bowman, and not

the bean, who controlled the reproduction (unto the eighth

generation) of Monsantos patented invention.

Our holding today is limitedaddressing the situa-

tion before us, rather than every one involving a self-

replicating product. We recognize that such inventions

are becoming ever more prevalent, complex, and diverse.

In another case, the articles self-replication might occuroutside the purchasers control. Or it might be a necessary

but incidental step in using the item for another purpose.

Cf. 17 U. S. C. 117(a)(1) ([I]t is not [a copyright] in-

fringement for the owner of a copy of a computer program

to make . . . another copy or adaptation of that computer

program provide[d] that such a new copy or adaptation is

created as an essential step in the utilization of the com-

puter program). We need not address here whether or

how the doctrine of patent exhaustion would apply in such

circumstances. In the case at hand, Bowman planted

Monsantos patented soybeans solely to make and marketreplicas of them, thus depriving the company of the re-

ward patent law provides for the sale of each article.

Patent exhaustion provides no haven for that conduct. We

accordingly affirm the judgment of the Court of Appeals

for the Federal Circuit.

It is so ordered.

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